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Environmental & Energy Insights

Can CAR transform the politics of cap-and-trade? Update for visual thinkers

I just updated my data for the Climate Action Reserve’s (CAR) issuance of offsets to reflect activity during the month of November. November was a relatively slow month with only 158,000 tons of offsets, called Certified Reduction Tons (CRTs), issued by CAR.  One new state entered the picture, Kansas, with the issuance of a sizable chunk of offsets from a landfill methane management project.  As of December 1, 2010, the total offset volume verified and issued under the CAR protocols comes to 8,407,713 tons. See figure 1a and 1b for a picture of the developing market for US offsets.

Figure 1a: CAR Offset Issuance by Project Protocol to December 1, 2010.

Figure 1b: CAR Offset Issuance by Project Protocol as a function of time to December 1, 2010.

In an effort to better illustrate and understand the political economy of the developing domestic offsets market, I created Figure 2, showing the distribution of offsets by state. It helps to drive home the point that CAR is fast becoming a program of national scope that should, over time, build constituencies in a number of states that will push for adoption of federal cap-and-trade legislation. Offset project owners will do this for no other reason than that it will increase the value ($/CRT) of their projects.  Of note, CAR is currently forming working groups to develop two agricultural offset protocols.  These protocols hold the promise of both producing significant tons for the California compliance market, if adopted by CARB as compliance grade protocols, and of adding a politically significant industry to the emissions trading constituency.

Figure 2: Origin of CAR Issued Offsets by U.S. State to December 1, 2010.

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